Just ten years ago, a card without a physical form seemed like something exotic. Today, however, I see a completely different picture: young people are opening their first account directly on their smartphones, while a “plastic” card is increasingly ordered simply out of habit or “just in case”. In conversations with customers, I hear fewer and fewer questions about whether it is safe to pay by phone, and more and more about whether it is actually possible to do without a plastic card altogether. So today, I suggest we take a closer look at what a virtual card is, how it differs from the familiar plastic card, and whether it really has a chance to completely replace it in our everyday lives.
The first thing to understand is how a virtual card differs from the one in your wallet.
A virtual card is a digital equivalent of a plastic card: it has the same card number, expiry date and CVV code, and is linked to the same bank account, but it does not physically exist. You cannot hold it in your hands — it lives in your bank’s app or in your smartphone’s digital wallet.
A virtual card online is no longer an innovative service for a select few, but an everyday feature offered by practically every bank. A virtual bank card works according to the same principles as a plastic one: you can use it to pay in shops, pay utility bills, make online purchases and earn cashback if this is included in the terms of service. So the difference is not in functionality, but simply in the form in which the card is issued.
Imagine a typical situation: you want to order something from an online store at nine in the evening, but your physical card is still being delivered or waiting for you at a branch. With a digital card, this is simply not an issue — the card details appear in the app immediately after your application is approved, and you can make a payment straight away without waiting several business days.
The main difference is speed, the way the card is obtained and the payment method itself: instead of a magnetic stripe or physical chip, contactless data transmission via your phone’s NFC module is used. You can apply for a digital card online in just a few minutes, without leaving home and without waiting for a courier or a queue at a branch.
The question of how to get a virtual card can actually be solved in three simple steps:
- Download the bank’s mobile app.
- Complete a quick online identification process (for example, via the Diia app).
- Sign the agreement using an electronic signature.
The card details — number, expiry date and CVV — are then sent to you by SMS or made available in a secure section of the app, and you can immediately add the card to Apple Pay or Google Pay. With a plastic card, you still need to collect it in person or wait for delivery, which takes days rather than minutes.
I would highlight several advantages that, in my opinion, explain the popularity of the digital format.
- Instant availability. The card is ready to use immediately after being issued, while the plastic card may not even have been sent for printing yet.
- Secure card details. The actual card number is not exposed on paper receipts or to third parties during payment — the transaction is processed using an encrypted token rather than the card number itself.
- Cost savings. Issuing a virtual card is usually free, unlike its plastic counterpart, where you may often have to pay for replacement or delivery.
- Convenience. The card is always at hand on your smartphone — you cannot leave it in a jacket or lose it separately from your phone.
- Flexibility and speed. You can instantly replace the card in the app if you have the slightest suspicion that your details have been compromised, and receive new card details just as quickly.
- Subscription management. A virtual card is particularly convenient as a “buffer” for recurring payments for services such as music, movies or software. If you decide to cancel a subscription or limit the amount charged, you can simply set a daily limit or block the specific digital card with one click, while keeping your main account secure.
I would also add that practically all bank credit cards are now available in digital format — this has become an industry standard rather than an exception. So when choosing a credit card, it is worth checking whether free virtual issuance is available.
It would be unfair to talk only about the advantages. Virtual cards also have some limitations.
First, they depend entirely on your smartphone: if your phone runs out of battery, you temporarily lose your means of payment unless you have another card or cash with you.
Second, not all terminals and services work equally well with contactless payments via smartphone, although such cases are becoming increasingly rare.
Third, for some transactions — for example, when processing documents at a notary’s office or identifying yourself at a government institution — you may still be asked for a physical card or passport rather than its digital equivalent.
Fourth, an older phone without an NFC module simply will not support contactless payments, in which case you will need a physical card or have to upgrade your smartphone.
And finally, there is a psychological factor: some people simply feel more comfortable holding a physical card in their hands, and that is perfectly understandable.
Yes, and this is one of the most common concerns worth clearing up. You can withdraw cash from a virtual card just as you would from a plastic one — all you need is an ATM that supports contactless technology. Here’s how it works:
- Hold your smartphone with the card added to your digital wallet against the ATM’s NFC reader.
- Confirm the transaction using biometrics or your PIN.
- Collect your cash.
Cash withdrawals directly at supermarket or pharmacy checkouts when making a purchase are also becoming increasingly common — here too, all you need is an NFC-enabled smartphone.
Such ATMs and POS terminals are now available in practically every major city, and their number continues to grow. Problems with withdrawing cash from a digital card mainly occur in smaller towns where the infrastructure has not yet been fully updated.
Yes, a virtual card works in any country around the world just like a plastic one, as it is linked to the same international payment system (Visa or Mastercard). Currency conversion when paying abroad takes place automatically at the bank’s exchange rate at the time of the transaction.
What’s more, the digital format makes travelling easier: you can simply open an additional euro or US dollar account in your mobile app, issue a card for it within a few minutes and use it while travelling without double currency conversion.
Europe and most developed countries have long been accustomed to paying by phone: in cafés, shops and public transport, no one will be surprised if you hold a smartphone or smartwatch up to a terminal instead of a plastic card.
I would like to take a closer look at this topic because security concerns are one of the main reasons people hesitate to switch to digital payments — although, paradoxically, the digital format itself is more secure.
The key to this security is card tokenisation — a process in which the actual card number is replaced with a unique digital code, known as a token, which is used for payments. Even if a merchant or fraudster intercepts transaction data, the actual card number will not be included. Digital wallets such as Apple Pay and Google Pay are built around this principle: they do not store your actual card number, but only its token, which is linked to a specific device. In simple terms, a digital wallet is an app on your smartphone that stores tokenised card details and allows you to pay by tapping your phone or watch instead of using a plastic card.
Despite this built-in advantage, basic security rules still apply:
- Never share your CVV, SMS password or verification code with third parties, even if someone calls claiming to be from the bank’s “security department”.
- Only install your banking app from official stores such as the App Store or Google Play.
- Enable biometric protection on your smartphone, as it is the first line of defence for your digital wallet.
- Regularly check the list of devices linked to your card and remove any you no longer use.
You can learn more about common fraud schemes in our article on protecting yourself from fraud, while our article on 3 rules of financial literacy will help you improve your basic personal finance skills and avoid common mistakes.
The trend I have been observing in recent years speaks for itself. The number of tokenised payment cards in Ukraine is growing every year. According to the National Bank, during the first nine months of last year alone, the number increased by approximately 13% to 18.6 million. Almost one in three active cards in the country is already tokenised, while more than half of all active cards are contactless. The figures speak for themselves: the digital format is no longer niche and has become the primary way new cards are issued.
However, in my opinion, the market is not ready to completely abandon plastic cards in the near future. There are older people who are accustomed to physical cards and are in no hurry to switch to smartphones as a means of payment. There are also situations where a plastic card is simply necessary — some terminals abroad, certain cash desks in smaller towns and, ultimately, the habit of having a “backup option” in your wallet in case your phone runs out of battery or you forget your charger at home.
That is why I see the near future not as a complete replacement, but as coexistence: the digital format will be the primary and faster option, while the plastic card will remain a backup for occasional exceptions.
Personally, I prefer the digital format — not because it is fashionable, but because it is practical: the card is available instantly, you cannot forget it at home, and the risk of your card details being compromised is objectively lower thanks to tokenisation. At the same time, I see no reason to dramatise the “death of plastic”: both formats will coexist for a long time, complementing each other.
If you are currently deciding which digital card to start with, try the SMART credit card: the virtual card is issued free of charge, you can apply for it in just a few minutes through the mobile app and immediately add it to your digital wallet. From there, all you need is your phone, a tap at the terminal and no unnecessary piece of plastic in your pocket.
Translation into English was created with the help of artificial intelligence.
